EUR/CHF Consolidation Above 0.9476, USD/CHF at 0.8930

Quick Look:

• EUR/CHF Consolidation: Neutral bias above 0.9476; bearish if below. Watch resistance at 0.9683.
• Key Levels: Important levels are 0.9252 (recent lows) and 0.9510 (61.8% retracement).
• USD/CHF Struggles: Around 0.8950; influenced by US yields and PMI data, SNB rate cuts.
• Economic Indicators: US PMI data shows growth; SNB cut rates to 1.25%, with possible intervention.

The current trend for the EUR/CHF currency pair shows a period of consolidation above the 0.9476 mark, with a neutral intraday bias. However, a bearish outlook persists if the resistance level at 0.9683 remains unbroken. Should the rate drop below 0.9476, further downside movement is anticipated.

Key levels to watch include 0.9252, which represents a potential retest of recent lows, and 0.9510, the 61.8% retracement level of the upward move from 0.9252 to 0.9928.

EUR/CHF Rebound Ends at 0.9228, Resistance 1.0095

The recent rebound appears to have concluded around 0.9228 in the broader context, reinforcing a bearish medium-term outlook. A significant resistance level is identified at 1.0095, with a resumption of the long-term downtrend expected below 0.9252, continuing the decline from 1.2004 in 2018.

USD/CHF at 0.8930 Amid Declining US Yields

The USD/CHF pair is currently struggling around the 0.8950 mark, largely influenced by declining US yields. Recent economic indicators, specifically the US PMI data, have tempered expectations for an immediate Federal Reserve rate cut, thereby providing some support for the US dollar.

The Swiss National Bank (SNB) is anticipated to implement another rate cut in September. The USD/CHF pair has retraced its gains in recent trading sessions, trading around 0.8930 in the early European session on Monday. The US Dollar Index stands at 105.70.

US 2-Year Yield at 4.73%, Fed Rate Cut Odds 65.9%

US Treasury yields have seen modest movements, with the 2-year yield at 4.73% and the 10-year yield at 4.25%. Speculation on a Fed rate cut shows that the odds for a September cut, according to the CME FedWatch tool, are 65.9%, down from 70.2% a week earlier.

US PMI at 54.6, SNB Cuts Rate to 1.25%

Recent US economic data shows the Composite PMI for June at 54.6, slightly up from 54.5 in May, marking the highest level since April 2022. The Manufacturing PMI rose to 51.7 in June from 51.3 in May, exceeding the forecast of 51.0. Similarly, the Services PMI increased to 55.1 in June from 54.8 in May, surpassing the consensus estimate of 53.7.

The SNB recently reduced its rate for the second time this year, lowering it from 1.50% to 1.25%. This decision, announced on Thursday, reflects the SNB’s assessment of the Swiss franc’s significant appreciation. SNB Chairman Thomas Jordan has indicated that the central bank is prepared to intervene if necessary.

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